Putin Handed Over $8 Billion In Contracts To His Russian Oligarch Friends

Russian businessman Arkady Rotenberg.Getty Images/Sasha Mordovets
Companies linked to Russian billionaire Arkady Rotenberg and Gennady Timchenko, both close allies of Russian President Vladimir Putin, were given contracts worth 309 billion roubles (£3.6 billion, $8.1 billion) since western sanctions were imposed on the men in March, according to a Bloomberg report.

The deals included a 228-billion- rouble project to build a bridge to Crimea from the Russian mainland as well as a large chunk of the 770-billion-rouble Power of Siberia gas pipeline.

The two men were sanctioned due to their links to key Russian industries. Rotenberg, a childhood friend of Putin's, owns SMP bank along with his brother Boris. The US Treasury claims the brothers "have provided support to Putin's pet projects" by winning and completing "approximately $7 billion in contracts for the Sochi Olympic Games and their personal wealth has increased by $2.5 billion in the last two years alone".

SMP Bank, which is also subject to sanctions and unable to trade with companies in the EU and the US, received a 10-year state loan of about 100 billion roubles at an interest rate of 0.51%, according to Bloomberg. The money was provided under the condition that Rotenberg's firm rescue another Russian bank, Mosoblbank, which had fallen into difficulties.

Timchenko meanwhile was one of the founders of Gunvor, one of the world's largest commodity trading companies. He also appears on the US sanctions list as the Treasury claims his "activities in the energy sector have been directly linked to Putin...[and] Putin has investments in Gunvor and may have access to Gunvor funds".

Gunvor denies the US Treasury claims and said in a statement:

"Russian President Putin does not and never has had any ownership, beneficial or otherwise in Gunvor. He is not a beneficiary of Gunvor or its activities."

Timchenko divested his ownership and control in the company in an irrevocable sale back in March, but has a number of other business holdings in Russia managed by Volga Group. Bloomberg reports that Anton Kurevin, a spokesperson for Volga Group, said contracts won by Timchenko "were obtained fairly through a competitive process".